Resource for article: https://propertibazar.com/article/digital-gold-droppdf_5a105650d64ab2173ad42384.html

Back in 2010 it had been clear that if Bitcoin became popular there was a logical next step that would eclipse GPU mining. An Application-Specific Integrated Unit, or ASIC, is a chip that is built to specifically accomplish just one task- an even more specialized computing unit than a GPU. If someone could build an ASIC designed specifically to solve the Bitcoin hash function, it would probably be able to crunch the numbers hundreds of times faster than a GPU and thus likely to win hundreds of times more Bitcoins. 

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But designing and fabricating a new ASIC chip could cost millions of dollars, take several months, and require business contracts. For most of 2011 and 2012 Bitcoins were simply not worth enough to justify this investment. But as Bitcoin's price began to rise in the 2nd half of 2012, the idea manifested into creating the first ASIC chip dedicated to mining Bitcoin. The 1st entrant was from a company based in Kansas City called Butterfly Labs. By October of 2012, $5 million of the machines were sold out on preorder. 

Around the same time, a young Chinese immigrant by the name of Yifu Guo, announced that he had created a company, Avalon, which was building its own Bitcoin-dedicated ASIC chips. Yifu promises that each device would be able to do 66 billion hashes per second, compared to the 2 billion that a GPU card could do.

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It had taken all of 2012 for the power on the network to double, but that power doubled again in just one month after Yifu's machines were shipped. At the same time, the network automatically adjusted the difficulty of the problem the miners needed to solve, to ensure the ten minute gap between new blocks of Bitcoins. For people who had built up fleets of GPUs, making a profit now became a lot harder. This lead to new development projects for specialized mining chips dedicated solely to mining Bitcoin. The price of Bitcoin was rising fast enough that it attracted interest from venture capitalists. The Bitcoin arms race had begun...